This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Spirit AeroSystems Recognizes Third Quarter Charges For Certain New Programs; Announces Settlement Of Severe Weather Related Insurance Claim









WICHITA, Kan., Oct. 25, 2012 /PRNewswire/ -- Spirit AeroSystems Holdings, Inc. [NYSE: SPR] today announced that it expects to record pre-tax charges of approximately $184 million on the 787 program; $163 million on the G650 Wing program; $151 million on the BR725 (Engine Nacelle Package for the G650); $88 million on the G280 Wing program; and $4 million on other combined programs. These combined forward loss charges total approximately $590 million, and will be included in the company's third quarter 2012 financial results.

"The execution of our diversification and growth strategy has proven very complex," said Jeff Turner, President and Chief Executive Officer, "as we rapidly expanded our customer-base, manufacturing sites, and product design capabilities, while managing multiple development programs with significant design changes and schedule delays. It is unfortunate that we have struggled on these development efforts. As we move forward our focus is on applying our lessons learned in strong program management, change control, and shop floor disciplines to drive performance on these programs and continue the solid performance on our core production programs," Turner concluded.

During the third quarter, the company continued to increase production rates and progress to full-rate production on a number of newly type-certified programs. The company no longer expects to achieve cost targets sufficient to maintain zero-profit margin contracts due to increasing supply chain, factory support, and labor costs. The cash use associated with the additional contract costs will occur over the majority of remaining contract deliveries. The current contract accounting shipments are expected to be delivered by 2018.

To address the charges in the quarter, the company successfully obtained the required lender consent to amend its senior secured loan and credit facility to adjust the senior secured leverage ratio through the first quarter of 2013 and the other financial covenant ratios through the second quarter of 2013, after which time the financial covenant ratios will revert back to pre-amended ratios. The amendment is expected to become effective on or about October 26, 2012. No event of default has occurred . 

Separately, the company reached a final settlement with insurers for all claims relating to the April 14, 2012 severe weather event at its Wichita, Kan. facility. The settlement amount of approximately $235 million reflects claims lower than previously estimated (approximately $400 million) and resolves all property damage, clean-up, recovery, and business interruption costs. The settlement amount less current quarter expenses will be recognized as a gain in the third quarter 2012. The cash settlement of $130 million ( $235 million less the $105 million cash advance received in the second quarter 2012) is expected in the fourth quarter 2012.

President and Chief Executive Officer Jeff Turner and Senior Vice President and Chief Financial Officer Phil Anderson will participate in a conference call presentation to securities analysts to review these announcements today at 11:00 a.m. Central time.

That presentation will be broadcast online at http://www.spiritaero.com/investor.aspx and presentation materials are available on our website at the same location. A replay of the presentation will be available at the same location after the call's conclusion.

Individuals are urged to check the website in advance to ensure their devices are configured for the audio stream.

Stock quotes in this article: SPR 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs